I have an esop retirement plan from a previous employer being paid to me in the next few weeks. I need to take about 30K out of it (to payoff all of my debt!!!) . How will this be taxed? What would be the best strategy to pay the least amount in taxes (Roth IRA?) ?

Please help.

P.S. Why should people under 59 1/2 be penalized for taking money out of these plans, since the money goes right back into the economy or reduces debt?

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